How Michael Thomas Built $200K Passive Income by 32

By InvestorKit

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TL;DR (Key Numbers)

• Client: Michael Thomas, 32, wholesale + retail motor industry

• Commercial portfolio: 5 assets

• Acquisition value: $7M+

• Passive income: $200k+ net p.a.

• Why commercial? Yield, defensive tenancy mix, longer leases

• Philosophy: Keep a buffer, then deploy; buy quality assets with strong figures

From Cash Pile to Cash Flow: “Buffer, Then Deploy”

When business is humming, cash stacks up—then inflation eats it. Michael keeps a sensible buffer, then deploys capital into productive assets aligned to long-term goals.

“If I have money in my account, it actually annoys me—I want a safe buffer, then I want it invested.”

Why Commercial (Not Just Residential)

After working with InvestorKit, Michael pivoted to commercial for stronger, more predictable net yields. For a primer, see How to Start Investing in Commercial Real Estate in Australia and our service page Commercial Buyer’s Agency.

Portfolio Structure: Diversity, Defense, and Vacancy Risk

• Diversity: Industrial + medical + mixed-use across QLD, NSW, and WA

• Vacancy mitigation: Multi-tenant exposure and defensive asset types

• Leases: Longer terms, quality covenants, proven operators

On management fundamentals, read Strategies for Managing Commercial Real Estate Investment Properties.

Live Deal Reviews (What Made These Stand Out)

Deal #1: Mixed-Use “Unicorn” in Regional QLD

• Price: $2.745M

• Net yield: ~9%

• Leasing: 1 head lease + ~10 sub-tenancies

• Vacancy in pocket: ~0%

Above-7% yields usually demand caution, but tight vacancy, multi-use demand, and a head-lease/sub-lease structure tipped this into “rare opportunity.” See our deep dive on checks in The Importance of Due Diligence in Commercial Investing and the Property Due Diligence Checklist.

Deal #2: Near-New Industrial, Newcastle, NSW

• Price: $1.81M

• Net yield: ~6.12% (~$111k net)

• Asset age: ~3 years (lower capex risk)

• Tenant: 25-year air-conditioning business

• Lease: 5×5×5

Defensive industrial—sticky tenancy, modern spec, lease profile that matches yield and risk. Learn more on the pod: The Deeper Details of Commercial Property Deals.

Deal #3: Medical (Dental) in WA + Negotiation Win

• Yield: ~7.15% net

• Tenant: Corporate-backed dental operator (15+ years; renewed 5×5)

• Issue found: Roof replacement flagged during DD

• Outcome: Tens of thousands negotiated to offset works

Numbers > ego. If the deal still stacks after quantified works and negotiation, proceed; if not, walk. Podcast episodes on DD: The Significance of Commercial Due Diligence and Doing Due Diligence in Commercial Property Investing.

Cash vs. Business vs. Property: Striking the Right Balance

Michael reinvests enough into the business to grow sustainably—and channels surplus into income-producing assets. Explore more perspectives on strategy on the InvestorKit Blog.

The “Hire Pros” Advantage

Be great where you’re great—and hire experts for everything else. Start with a conversation: Book your FREE discovery call or learn about our Commercial Buyer’s Agency.

Key Takeaways for Business Owners

• Define the goal: If it’s income security, prioritise yield + lease quality (get started here).

• Diversify intelligently: Mix asset types and locations to dampen vacancy shocks.

• Numbers over ego: Price in capex, re-test the deal, and decide (DD checklist).

• Keep a buffer, then deploy: Idle cash loses to inflation; put it to work.

• Use a team: Expertise across research, acquisition, and negotiation compounding results.

Thinking About Commercial in the $2M+ Range?

InvestorKit helps business owners build defensive, cash-flowing commercial portfolios—often starting in the $2M–$10M bracket, with a focus on data, tenancy strength, and risk management.

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browse our podcasts.

Want more like this? Read The Importance of Due Diligence in Commercial Investing or explore About Us.